Futron Study Predicted Big Benefits for New Mexico, Lacked Risk Assessment

Credit: Futron Corporation
Credit: Futron Corporation

Ten years ago, New Mexico released an economic impact study conducted by the Futron Corporation that assessed the potential benefits of Spaceport America and the state’s newly announced partnership with Richard Branson’s Virgin Galactic.

“The suborbital market features a strong increase in launches because of growing demand for space tourism, with the potential number of launches from the New Mexico spaceport increasing from 61 in 2010 to 426 in 2020,” the report states. “Futron estimates that the spaceport has the potential to provide the basis for creating approximately $460 million of additional economic activity in New Mexico, with some 3,460 new jobs in 2015.”

Ten years later, anchor tenant Virgin Galactic has not flow a single suborbital spaceflight with its future schedule unclear.  Spaceport America sits largely empty in the desert, having largely used for suborbital sounding rocket launches. The facility has cost New Mexican taxpayers around $225 million, with that amount rising as the facility operates at a loss.

The Futron study looked at maximum possible benefits in terms of spaceflights and economic impact based on assumptions and data provided by New Mexico. Futron did not look at the risks associated with the venture, including delays in construction or with the technology and companies involved.

I’ve reproduced the executive summary below.

New Mexico Commercial Spaceport
Economic Impact Study
for State of New Mexico Economic Development Department
December 30, 2005

Full Report [PDF]

EXECUTIVE SUMMARY

The commercial space industry in the United States is undergoing a major transformation, with the emergence of new markets and new companies to serve those markets. Suborbital space tourism companies have attracted the interest of thousands of prospective customers, while several tourists have already flown on orbital missions to the International Space Station (ISS). A number of companies are developing small, inexpensive launch vehicles designed to serve commercial and government customers and to launch payloads on short notice. NASA is also fostering the development of a revitalized commercial space industry by offering to help companies develop spacecraft that can transport cargo and crews to and from the ISS.

While there are several spaceports in the United States today, these are primarily older facilities designed to serve large, expensive, expendable launch vehicles, and are ill-suited for the new generation of small, responsive suborbital and orbital vehicles. This situation presents an opportunity for states to develop new spaceports that are more agile and less expensive than the legacy facilities.

The Futron Corporation, under a contract from the State of New Mexico Economic Development Department, has studied the potential economic impact of one such proposed spaceport in southern New Mexico, the Southwest Regional Spaceport. This report provides a forecast for potential spaceport activity and resulting economic impact for the years 2010 through 2020, based on the spaceport beginning operations in 2009. The results of this analysis should be considered forward-looking estimates of the maximum possible economic impact of the spaceport should the spaceport and related industries be developed and utilized to their full potential.

In the first part of this study, Futron developed a forecast of the potential number of launches that could be hosted by the spaceport between 2010 and 2020, as summarized in Figure 1 below. The launch market is divided into three specific classes: suborbital launches, small orbital launches, and large orbital launches. The suborbital market features a strong increase in launches because of growing demand for space tourism, with the potential number of launches from the New Mexico spaceport increasing from 61 in 2010 to 426 in 2020. Orbital space tourism and commercial resupply missions to the ISS may generate up to three launches per year of large orbital vehicles between 2010 and 2020, and there will be no more than one launch a year of small orbital vehicles during the forecast period due to range limitations for small expendable launch vehicles at the spaceport.

futron_spaceport_america_potential_launchesBased on this launch market forecast, Futron developed a forward-looking assessment of the economic impact of the spaceport in 2015 and 2020 based on Governor Bill Richardson’s vision for creating a new commercial space transportation and manufacturing cluster in southern New Mexico, along with key assumptions provided by the New Mexico state government. In summary, Futron estimates that the spaceport has the potential to provide the basis for creating approximately $460 million of additional economic activity in New Mexico, with some 3,460 new jobs in 2015. These figures could increase to about $550 million of additional economic activity and 4,320 new jobs in 2020 (see Figure 2). These projections include the following major categories of economic activities: space transportation, visitor spending and tourism, and Rocket Racing League operations. All economic impact figures and assumptions presented throughout the study are in current 2005 dollars.

futron_spaceport_america_economic_impactsFutron projects that southern New Mexico has the further potential to attract an additional 1,000 to 1,500 jobs in space vehicle and aircraft manufacturing, headquarters operations and support services activities and in excess of $200 million in related economic activity by 2020. These estimates are strongly dependent on the ability of the State of New Mexico and early commercial space transportation operators to attract manufacturers of reusable launch vehicles and aircraft, along with their key suppliers, to locate manufacturing facilities in close proximity to customer firms operating out of the spaceport. The analysis is also based on the assumption by the State of New Mexico that one specific major commercial space transportation and manufacturing firm wins a pending NASA award for Space Station cargo and crew re-supply services, and subsequently locates its core operations facilities in New Mexico, along with the assumption that emerging public and federal markets for commercial space transportation services will develop without major interruption for the foreseeable future.

Spaceport construction-related impacts are anticipated to occur prior to the period under consideration in this study. Such impacts will be restricted to the years 2006-2008, and are expected to reach a maximum of approximately $331 million of additional economic activity and 2,460 new jobs in 2007. Additional economic impacts from new hotel and other tourism infrastructure construction are not included in this estimate.

The majority of the economic impact from the spaceport will be concentrated in the vicinity of Las Cruces, with secondary impacts anticipated for Albuquerque and tourism-centric localities elsewhere in the state. The economic impact of this new spaceport is potentially quite large, reflecting the strong upscale potential of the nascent space tourism industry. If successful, the spaceport can serve as the magnet for an emerging commercial space transportation cluster, which leverages economies of scale in spaceport operations and close operator-manufacturer-supplier relationships to attract new launch firms and RLV and aircraft producers to co-locate facilities in southern New Mexico.